(Alliance News) - HeiQ PLC on Thursday issued a profit warning as it announced plans to raise funds to fund a new manufacturing plant in Portugal.
In a wide-ranging statement, the London-based materials innovation and hygiene technology company warned earnings before interest, tax, depreciation and amortisation would be below market expectations in "highly challenging" market conditions.
HeiQ expects 2023 revenue to be in line with market expectations, at around USD41 million. But, it highlighted historically high inventory levels in the third quarter and "ongoing challenges" in the final quarter would see a profit shortfall.
Cash as at December 31 was around USD10 million having utilised additional headroom under the current facilities, HeiQ said, with net debt position, excluding liabilities from lease contracts, of USD2 million at year end. Net debt including lease liabilities amounted to around USD10 million at the end of 2023.
Market conditions in the first quarter of 2024 remain challenging, the company said.
HeiQ also announced plans to raise GBP2.4 million through a placing, retail offer and convertible loan note offer at 8.7 pence per share.
Together with existing cash resources, the net proceeds are being utilised to finance the acquisition of a manufacturing plant in Portugal for GBP5 million.
HeiQ intends to consolidate the group's current and future activities in Portugal at the newly acquired site.
In addition, HeiQ said it is in the process of appointing a new auditor, following the resignation by Deloitte. It company said would extend the accounting reference date for the financial year 2023 by six months to June 30, 2024 to enable the incoming auditor to properly onboard and complete the audit in a reasonable timeframe.
Shares in HeiQ fell 5.7% to 8.70 pence in London on Thursday.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
Heiq (HEIQ)